U.S. markets have rallied back to record highs and recovered their losses, yet P/E multiples on the S&P 500 index stand at 21 times compared to 9 to 10 times for private companies, raising serious questions about whether current levels are justified.
The war's impact on corporate earnings has not yet materialized. At The Family Office, we expect the real effects to begin surfacing in Q2 and Q3 results, with oil supply remaining constrained even if an agreement is reached.
Inflation and its impact on global economies remains the principal question mark, though artificial intelligence and improved corporate cost structures may limit the scale of the potential economic fallout.
Asian and Chinese markets appear attractive after losing all of their year-to-date gains in three weeks, but entry should be through direct equities rather than private debt or private companies.
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